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In the current global environment, leveraging socialand business contacts has become essential in explor-ing and exploiting prospects for growth and success in

the marketplace. Today’s fast-paced business cycles cre-ate windows of opportunities that do not stay open forlong, and thus early internationalization becomesimperative (Sapienza et al. 2006), especially for smallerborn-global firms (Freeman et al. 2010). In these situa-tions, even the most alert and flexible companies mayfind it difficult to move with the speed required to takefull advantage of opportunities without the assistance ofnetworks in the marketplace. To execute strategies effec-tively, firms may increasingly need to rely on networks,

consisting of multitudes of people and organizations tocreate innovation and commercialize products to inter-national markets (Coviello and Munro 1995, 1997;Elfring and Hulsink 2003; Kelly 2000). Networking,sometimes facilitated by international trade shows(Evers and Knight 2008; Shoham 1999) and variousindustry events, is especially important for small andmedium-sized enterprises (SMEs) considering that theyare often significantly resource constrained to take fulladvantage of new opportunities in the marketplace.

Hoang and Antoncic (2003) review 15 years of researchinto the consequences of networks in new ventures andSMEs and find that though extensive work has beendone on network relationships, governance, and struc-

The Role of Entrepreneurial Networks in the Exploration andExploitation of InternationalizationOpportunities by Information andCommunication Technology FirmsElena Vasilchenko and Sussie Morrish

ABSTRACTThis article investigates the role of entrepreneurial social and business networks in the internationalization of high-technology firms. The authors present case study evidence from born-global information and communication tech-nology firms that shows that established and newly formed social networks can be instrumental in exploring interna-tionalization opportunities. These social networks potentially lead to collaborative cooperation and form part of anentrepreneur’s broader business network that facilitates exploitation of internationalization opportunities culminated bysuccessful entry into foreign markets. The study incorporates contemporary literature and offers an internationalizationopportunity exploration–exploitation model emanating from the entrepreneur’s network configuration. In doing so, ittakes a process approach and provides much needed qualitative evidence in network research.

Keywords: entrepreneurial networks, internationalization, born global, information and communication technology firms

Journal of International Marketing

©2011, American Marketing Association

Vol. 19, No. 4, 2011, pp. 88–105

ISSN 1069-0031X (print) 1547-7215 (electronic)

Elena Vasilchenko is Director, Agitavi InternationalLtd., New Zealand (e-mail: elena.vasilchenko@agitavi.com).

Sussie Morrish is Senior Lecturer in Marketing, Depart-ment of Management, University of Canterbury (e-mail:sussie.morrish@canterbury.ac.nz).

Role of Entrepreneurial Networks 89

ture, a more process-oriented investigation is yet toemerge. A recent and timely response to this is Slotte-Kock and Coviello’s (2010) process-focused review,which offers a theoretical framework for investigatingnetworks as a developmental outcome using multipleperspectives. Networking could substantially improvethe ability of small companies to quickly explore andexploit opportunities, thus improving their competitive-ness and, by the same token, their likelihood of survival.A better understanding of how networks affect pro-cesses such as internationalization therefore would beuseful in theory and practice. This article investigatesthe role of networks (both social and business) in facili-tating the internationalization of high-technology firms.More specifically, the focus of the research is on howinformation and communication technology (ICT) firmsuse networking as they pursue internationalizationopportunities and eventual globalization. The success ofICT firms depends largely on their ability to innovateand commercialize new product offerings. The verynature of the industry means that firms operate in anextremely competitive environment that is subject tocontinuous and disruptive innovations and character-ized by exceptionally short product life cycles with con-stant product updates and upgrades. Therefore, successis embedded not only in the firm’s ability to developinnovative products or services but also in the speed atwhich the firm commercializes these innovations.

Although domestic markets may be important as alaunching platform for new market offerings, firms thatoperate in this sector often need to commercialize on aglobal scale. Doing so usually requires the efficiency andeffectiveness of commercialization strategies. Literaturefrom more than a decade of empirical research on inter-nationalization patterns experienced by technologyfirms indicates that a majority of ICT firms are builtwith a global focus from inception (Coviello and Munro1995; Litvak 1990). Regardless, many firms are oftendisadvantaged by the lack of internal resources neces-sary to roll out global product commercialization. How-ever, such firms are able to circumvent these challengesby networking with people and organizations that, inturn, become important sources or providers ofresources necessary for fast and early commercializationof innovative products to the global marketplace. Thesenetworks, largely driven by the entrepreneur or founder(O’Donnell et al. 2011), are often dynamic in natureand change considerably over time to align the networkwith the environment (Slotte-Kock and Coviello 2010),after which time (e.g., entering a new market) the focalfirm shifts directions.

Given this foundation, it is important to understand howand which networks are used by entrepreneurs to enableinternational commercialization of their firms’ innova-tion; this is the focus of the study. We investigate fourcases of New Zealand born-global ICT firms, with par-ticular focus on how high-technology firms use network-ing and then integrate these activities into their strategiesto commercialize products to the global marketplace.

This work contributes to the literature by offering aninternationalization model that reflects how social andbusiness networks facilitate the processes of explo-ration and exploitation of internationalization oppor-tunities. This approach addresses Hoang and Anton-cic’s (2003) plea for more qualitative investigation intonetwork research with a process focus (Slotte-Kock andCoviello 2010).

BACKGROUND LITERATURE

Although a founder’s previous work experience hasbeen suggested as one of the most important influencesof new business success (Cooper 1981), it may not nec-essarily be sufficient if a new venture wants to interna-tionalize quickly. In general, experience is considered anasset especially when founders have built up managerialand other competencies. However, Starr and Bygrave(1991) argue that entrepreneurs could suffer from whatthey refer to as the liability of “sameness” when theystart a new venture. This may occur with overconfi-dence such as when the entrepreneur is reluctant tochange from a past successful strategy even if the condi-tions have changed. In contrast, Vesper (1980) arguesthat start-up experience not only acts as a proxy forskills and competencies but also enables the building ofnetwork contacts.

In the context of internationalization, an effective useof networks enables companies to overcome barriers,such as relatively small company size, lack of internalresources, and distance from international markets, toboth innovate and execute on the global stage, creatingincreased export revenues (Chetty and Wilson 2003;Kelly 2000; Oviatt and McDougall 1994). Research hasidentified that for SMEs and entrepreneurial compa-nies, the ability to create and use networks can facilitateproduct commercialization across international mar-kets (Chetty and Wilson 2003; Coviello and Munro1997), effectively enabling them to compete in theglobal marketplace (e.g., Freeman et al. 2010). Withinthe ICT sector, consisting largely of SMEs that develop

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and commercialize their own technology products,global commercialization is viewed as a necessaryimperative, rather than a matter of choice (Crick andSpence 2005; Smallbone and North 1995). Moreover,unique contexts make it crucial for technology firms toinitiate global commercialization shortly after inception(Bell, McNaughton, and Young 2001; Litvak 1990).Alahuhta (1990) suggests that the product strategy ofmost high-technology firms is generally based on aninnovative product offering right from the start that isdeveloped in response to an identified global need, thusthe need to move quickly to develop international mar-kets. This problem is amplified for small technologycompanies because they are constantly confronted bynew products and technologies that often emerge inglobal markets spearheaded or backed by large, well-resourced, multinational companies, resulting in shortproduct life cycles. This poses huge challenges to firmsoperating in the industry. Consequently, it is essentialfor high-technology companies to push global productvolumes from inception before innovative offeringsreach obsolescence and while demand has not beenreplaced by yet another disruptive innovation (Bell,McNaughton, and Young 2001; Litvak 1990). For thesehigh-technology companies (with a global focus frominception), survival often largely depends on howquickly they enter international markets (Bell,McNaughton, and Young 2001; Litvak 1990; Small-bone and North 1995). This makes high-technologyfirms different from other companies whose fundamen-tal reason for developing international markets is togrow and increase profitability. The question thereforeis not whether high-technology firms should commer-cialize their innovation to a global scale but rather howbest to go about it.

Extant network literature provides a significant and richbase to gain insight into how firms access global mar-kets and enable effective product commercializationacross them. Indeed, Elfring and Hulsink (2003) arguethat networks are widely recognized as an importantaspect of internationalization success. Coviello andMunro (1995) propose that networks play a significantrole in many managerial strategic decisions, such asmarket selection and entry. In line with this view,McDougall, Shane, and Oviatt (1994) show that net-works help founders of international new ventures orborn-global firms identify international business oppor-tunities and that these networks seem to have moreinfluence on the founder’s choice of countries than thepsychic distance from the home country. There is com-pelling argument therefore that networks can be an

effective vehicle through which global commercializa-tion of innovation is enabled, first through access tointernational markets and second by being the meansthrough which firms are better positioned to identifyand respond to potential opportunities in the globalmarketplace. This being said, there are different types ofnetworks that entrepreneurial firms can tap. In the lit-erature and in practice, these are often classified intosocial and business networks.

Social and Business Networks

In general, networks consist of a set of actors linked bysome set of relationships (Hoang and Antoncic 2003)and can be broadly classified into social or business net-works. Social networks involve those that are developedfrom personal relationships, whereas business networksare those that involve some form of repeated economicexchange. We discuss both types of networks in the fol-lowing sections.

In the context of entrepreneurship literature, Gilmoreand Carson (1999, p. 31) define social networks as “acollection of individuals who may or may not to beknown to each other and who, in some way contributesomething to the entrepreneur, either passively, reac-tively or proactively whether specifically elicited ornot.” The role of social networks in the process associ-ated with global commercialization of innovation is sup-ported by social network theory, which is based on theassumption that it is impossible to comprehensivelyexamine economic exchange without investigating thesocial context in which it is embedded (Granovetter1985). Indeed, Mainela (2002) argues that becauseorganizational behavior is built around the actions ofthe people who act on behalf of the organization, socialrelationships inevitably become involved in businesspractices. Early research on social networks was devel-oped within the boundaries of entrepreneurshipresearch but has since gained popularity among scholarsand been applied to internationalization research.

A network has a central figure, which can be either anindividual or an organization. Thus, the development oforganizational networks may be orchestrated or drivenby an individual (or a team), and the boundariesbetween the individual and the organization may be dif-ficult to define. In the context of this article and consis-tent with literature, the key driver of the global productcommercialization process of small high-technologyfirms is often the entrepreneur (Knight and Cavusgil1996; Oviatt and McDougall 1994, 1997).

Role of Entrepreneurial Networks 91

An entrepreneur’s network has the potential to signifi-cantly influence the internationalization route of thefirm, particularly in the earlier stages of global commer-cialization when networks are used to gain informationabout foreign business opportunities or potential inter-national business partners (Johanson and Vahlne 2003).In addition, Coviello and Munro (1997) find that loca-tion is an important consideration, given that entrepre-neurs may rely on their social networks when choosinginternational markets based on the network’s location.The uncertainties associated with entering a new marketcould be reduced if the entrepreneur can access localmarket information from personal or business contacts.

Despite the dominant use of social network theory toexplain rapid internationalization patterns of entrepre-neurial firms, the role of business relationships has alsobeen highlighted in the literature. From a marketing per-spective, Anderson, Hakånsson, and Johanson (1994, p.2) define business networks as “a set of two or moreconnected business relationships, in which eachexchange relation is between business firms that areconceptualized as collective actors.” These actors ofteninclude competitors, suppliers, customers, distributors,and government (Axelsson and Johanson 1992; Sharmaand Johanson 1987). Unlike social networks in whichthe “actors” are informally linked to each other(O’Donnell et al. 2001), business networks constitutegoal-oriented cooperation among two or more firmsinvolving a mutual exchange of resources and/or con-certed efforts to resolve problems by entering into for-mal agreements (O’Donnell et al. 2001).

The use of networks through the establishment of long-term relationships is instrumental in a firm’s develop-ment of international business activities. As firmsexpand into foreign markets, business networks canfacilitate the acquisition of experiential knowledgeabout international markets and therefore can bestrongly relied on, especially during the internationalopportunity exploitation stage (Eriksson and Johanson1997). The importance of networks has been high-lighted in investigations into the internationalization ofentrepreneurial but resource-constrained firms, whichview networks as an answer to the common barriers offoreign market entry (Chetty and Wilson 2003).

High-technology firms, which are often smaller entre-preneurial firms, rarely possess all the necessary skills,knowledge, and resources needed to successfully enterand sustain a competitive position in foreign markets(Crick and Spence 2005), and their size limits their

ability to influence or control external factors. To over-come such limitations, networking could offer a usefulalternative strategy that helps minimize these inherentweaknesses. In particular, relationships with customers,suppliers, and other business partners are consideredcrucial when introducing a new product to foreign mar-kets. Face-to-face encounters with business partners,clients, and business representatives allow international-izing firms to get a feel for the market, gain insight intohow business is conducted there, demonstrate interest,and begin building trust (Blomstermo and Sharma 2003;Wilson and Mummalaneni 1990). Business networkscan also speed internationalization by providing syner-gistic relationships with other firms that complementtheir resources at various stages in the value chain(Jones 1999; Nummela 2002).

Network Theory and International Entrepreneurship Interface

Although marketing scholars have recognized the signifi-cance of networks (Anderson, Hakånsson, and Johanson1994; Sharma and Johanson 1987), network researchhas received more attention in both international busi-ness (e.g., Axelsson 1992; Bartlett and Ghoshal 1991;Forsgren 1989; Johanson and Mattsson 1988) and entre-preneurship (e.g., Aldrich and Zimmer 1986; Larson andStarr 1993). Analysis of networks later received attentionamong international entrepreneurship researchers thatemphasized the value of network theory in the search foran explanation for the accelerated internationalization ofsome firms. In particular, several researchers have putforth calls to draw on network theory in internationalentrepreneurship (Bell 1995; Coviello and Munro 1995,1997; Oviatt and McDougall 1994). Relevant worksinclude Bell’s (1995) comparative study of export behav-ior among entrepreneurial software firms and Johansonand Vahlne’s (2003) network model that calls specificallyon international entrepreneurship researchers to inte-grate network theory into existing theories of firm inter-nationalization. Strong international business networkshave also been identified by Oviatt and McDougall(1995) as one of the most important characteristics ofsuccessful global start-ups. In their work on new ventureinternationalization theory, Oviatt and McDougall(1994) argue that the existence of network structures isone of the most powerful resource-conserving alterna-tives to internationalization. Given this argument, it isimplied that firms must not only engage in networkactivities but also “align the network with the environ-ment over time at points where the focal firm shifts direc-tion” (Slotte-Kock and Coviello 2010, p. 51) and use

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networks such that they fully benefit from them (Johan-son and Mattsson 1988; O’Farrell and Wood 1999).These benefits may include, among others, greaterprospects for identifying global opportunities for a par-ticular innovation and enhanced access to resourcesneeded to enable entry into international markets(Blomqvist 2002; Chetty and Wilson 2003; Elfring andHulsink 2003; Kelly 2000).

Insufficient resources are a huge obstacle to expansion,especially among firms that need to have a global pres-ence. To a typical financially constrained entrepreneur-ial firm, a network exchange structure offers an oppor-tunity in which resources can be gained withoutincurring large investments, providing a way to maxi-mize adaptability to its environment (Larson 1992). Forexample, studies have shown that networks are impor-tant in the internationalization processes of firms fromDenmark (Servais and Rasmussen 2000), New Zealand(Coviello and Munro 1995), and three Scandinaviancountries (Bell 1995).

Opportunities arising from social and business networkshave been explicitly acknowledged by the proponents ofthe network perspective of internationalization. However,the process of recognizing and/or creating the opportuni-ties and the nature of decision making that may accountfor the often-unsystematic internationalization behaviorhave received scant attention in existing models (Bell1995; Johanson and Mattsson 1992; Jones 1999).

This gap has provided us with an opportunity to explorenew ways to better understand the network mechanismsunderlying internationalization that would partiallyaddress the call to allow for influence of “randomness”and “unpredictable incidents” factors on network devel-opment, when “investigating, interpreting, and depict-ing network process” (Slotte-Kock and Coviello 2010,p. 49). We approached this issue by adopting the con-ceptualization of internationalization as an entrepre-neurial process and positioning internationalization asthe process of exploration and exploitation of opportu-nities that lead to presence in international markets(McDougall and Oviatt 2003). By conceptualizing inter-nationalization as an entrepreneurial process in investi-gating how entrepreneur-centered networks facilitatethe route to the global marketplace, we use an inter-national opportunity exploration–exploitation frame-work and focus on identifying the roles of networks inthis internationalization processes. Although this con-ceptualization positions internationalization as anopportunity-based process, it also acknowledges the

entrepreneur as a key driving force and networks as amain influencing factor throughout the process. This isconsistent with the notion that internationalization doesnot happen in isolation but is embedded in the broadersocial and business context in which “the entrepreneurenacts [his or her] organizing context (network) … [formanagement] in a network rather than management ofa network” (Slotte-Kock and Coviello 2010, p. 47).Through managing in networks, the process of inter-national opportunity exploration–exploitation is essen-tially channelled, directed, facilitated, or inhibited. Indoing so, we can trace how different parts of networksare activated at different stages to accommodate differ-ent requirements of the firm. Furthermore, this partlyaddresses Coviello and Munro’s (1995, 1997) explicitcall for more studies that investigate the role of net-works in new ventures in a time sensitive manner.

RESEARCH METHODOLOGY

The aim of this study is to explore how entrepreneurialnetworks facilitate the speedy internationalization ofsmall ICT firms. We do so by focusing on small high-technology firms in New Zealand through an in-depthinvestigation of the role of networks in this process. Wedeemed it appropriate to use a qualitative approach,more specifically with a multiple case study design tofully understand the process. Following Eisenhardt(1989), we specified the number of case sites before ini-tiating the research, selecting four case sites.

Case Selection

We purposely selected participating companies (see Table1) following specified criteria. First, the companies mustbelong to the ICT sector, defined as any technologies usedto “store, receive, transmit, and algorithmically transformany type of information that can be digitised—numbers,text, video, music, speech, programs, and engineeringdrawings, to name but a few” (Brynjolfsson and Hitt2002, p. 23). Second, the company must be a new ICTfirm. When defining new technology-based firms, the agelimit most often required in the literature is six years(Coviello 2006). The selected cases are between two andsix years. Finally, companies must be born global, whichmeans that they needed to initiate their internationalactivities within the first three years of inception (Coviello2006; Knight, Madsen, and Servais 2004).

Case 1. Xero (www.xero.com) produces an onlineaccounting system designed specifically for SMEs. The

Role of Entrepreneurial Networks 93

system is designed to connect business owners, staff,bookkeepers, accountants, and other financial advisersto the same financial system over the Internet, employ-ing the software as a service (SaaS) model. Xero wasborn out of the frustration of a software entrepreneurand a specialist small business accountant at beingunable to find a simple and affordable accounting prod-uct for SMEs. The founders identified the businessopportunity in 2003, but it was not until 2006, encour-aged by growing Internet access, advancements in webdevelopment techniques, and increasing acceptance ofthe Internet in business, that the idea came to fruition.Xero’s beta program began in November 2006, fivemonths after development started, involving SMEs andtheir accountants. Following a successful limited publicrelease in April 2007, the software was fully released tothe general market in August 2007. The company simul-taneously completed an initial public offering of ordi-nary shares, raising NZ$15 million in June 2007. Eight-een months after start-up, Xero had solidly establisheditself in the New Zealand market by forming strategicrelationships with major New Zealand banks and theaccounting community. The firm has successfullyentered the U.K. market and initiated entry into the Aus-tralian market. By August 2008, the firm had more than2000 paying customers and employed 47 employeeswho develop markets and sell Xero products fromoffices across New Zealand, the United Kingdom, andAustralia.

Case 2. Founded in 2006 by two technology entrepre-neurs, Tomizone (www.tomizone.com) is an Auckland-based private start-up company offering an easy, low-cost broadband Internet connection with Wi-Fi (theinternational standard for wireless broadband), inte-

grated into an easy-to-use, world-class managementplatform. After building the prototype system, thefounders attracted a third founding shareholder, arenowned advocate and investor in New Zealand inno-vation and technologies. He is also the owner of aninvestment company and founder of one of the largestretail chains in the country. This development was fol-lowed by the launch of the beta version of Tomizone’sproduct in August 2006, and subsequent companygrowth and development followed. Since its founding in2006, the company has developed several valuable inter-national partnerships that enabled the company to workon distribution of its hotspot software inside a range ofproducts produced by partners. The company is now aninternational company with seven employees at its head-quarters in New Zealand and has offices and partners inAustralia, Fiji, and India.

Case 3. SimWorks (www.simworks.biz) is a privatelyheld company specializing in the development of inno-vative mobile antivirus applications. The company wasestablished in 2002 by an entrepreneur who, beforefounding SimWorks, was involved in the wireless indus-try as a legal adviser to operators and developers. By thetime the company was incorporated, the first prototypeof the product and the company’s business plan hadalready been developed. This enabled the company’sfounder to approach prospective investors and secureinitial investment for research-and-development activi-ties. The research and design activities continuedthroughout 2004. At the beginning of 2005, SimWorkssigned a deal with the Australian mobile operatorOptus, and they began work on the development of apersonalized mobile application. It was a great successfor SimWorks at that time to conclude this partnership,

Table 1. Summary of Case Firms’ Details

Age Governance Number of Overseas Markets Company Name Description (Year Founded) Founders Structure Employees (Year of Entry)

Xero Online accounting 2 (2006) 3 Public 47 United Kingdom (2008)software Australia (2008)

Tomizone Wi-Fi hotspot 2 (2006) 2 Private 7 Australia (2007)software Fiji (2008)

India (2008)

SimWorks Phone backup 6 (2002) 2 Private 5 Australia (2005)

Robot-Hosting Artificial intelligence 4 (2004) 1 Private 16 Canada (2006)software Australia (2007)

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though product development delays occurred and nego-tiations took more time than was initially expected.Despite some challenges, the company continues itsoperations and negotiations with local and internationalmobile operators to form partnerships. SimWorks’sproduct has recently been recognized as one of the top-ten products of its kind in the world as assessed bytelecommunications analyst Visiongain (SimWorksInternational 2007).

Case 4. Robot-Hosting (www.robot-hosting.com)designs, develops, and markets software for self-serviceartificial intelligence robots. These robots have compu-tational intelligence exceeding that of humans and haveuseful applications in business, academic, and publicservice organizations. Looking like humans, speakingmany languages, and enabled to provide emotionalresponses, these robots work as assistant lecturers atuniversities, salespeople in retail stores, and nurses inhospitals. The company was established in 2004 as anartificial intelligence production branch of its parentcompany, which is a recognized expert in developinghigh-quality software applications and multimedia sys-tems in New Zealand. Robot-Hosting’s founder is acomputer engineer who migrated to New Zealand in1990 and completed his doctoral studies examiningcommonsense reasoning and ways of teaching robots tomake “commonsense” judgments. At the time, thefounder began collaborating with the Electrical Engi-neering Department at the University of Arizona to cre-ate a virtual teacher of electrical engineering concepts.In 1995, he founded his first company that has sinceevolved from initially designing educational computergames with mind-developing content to designing com-plex, high-quality multimedia systems. In 2002, thecompany began developing multimedia robots, and in2004, Robot-Hosting was formed as a separate com-pany focusing on artificial intelligence production. Cur-rently, the company has a presence in the United King-dom and Australia, in addition to its New Zealandmarket.

Data Collection and Analysis

We collected the main data through recorded semistruc-tured interviews that were conducted with onefounder/entrepreneur from each case firm. When thecompany had multiple founders, we interviewed thefounder/entrepreneur responsible for decisions relatedto the international involvement of the firm. This satis-fies the criteria that the informant must be an influen-tial, prominent, and well-informed person in the organ-

ization selected on the basis of his or her expertise inareas relevant to the research (Marshal and Rossman1995). We conducted four interviews lasting up to twohours.

We established a case study protocol to ensure that simi-lar procedures were followed for all interviews (Yin1988). General topic areas were forwarded to theinformants before the interview to allow for prepara-tion, and an interview protocol was used in all inter-views to ensure consistency and focus within theboundaries of the investigation. We used open-endedquestions that allowed the interviewer some freedom toextend the questions and the participants to expand oninteresting and unique aspects of the process.

To supplement the interview material, we obtainedarchival data that consisted of planning documents,internal reports, and other relevant records. We alsosourced secondary published data mainly from the weband business and trade press. Multiple sources of datahelp reduce the potential for bias that could occurthrough inadequately documented evidence and poorrecall or articulation in the interviews. Table 2 presentsthe summary of the collected supplemental documentsfor each case.

Following Yin’s (1988) recommendations, we main-tained a database of all recorded interviews, transcripts,and notes made from examination of various documentsfor analysis. Before drawing conclusions, we structureddata analysis along three steps involving (1) a presenta-tion of the case descriptions as a way to organize the keyfindings, (2) a within-case analysis, and (3) cross-caseanalyses.

We initially developed case descriptions for organizingthe case study after the interview with each informantwas conducted and transcribed. A key aspect of this stepis developing a chronology of events. The use of inter-view recordings was particularly important to ensure thatnone of the contextual information, such as intonation,was lost in the transcription. After completing thechronology of events, we identified the gaps or points ofclarification and used secondary sources of data. The sec-ond step involved within-case analysis performed in anattempt to thoroughly understand case-specific patternsbefore proceeding to the third step, which involved find-ing cross-case patterns and differences. The third stepwas a thematic analysis, a common method of qualitativeanalysis used to code data by identifying themes withinthe identified research framework (Boyatzis 1998).

Role of Entrepreneurial Networks 95

A theme is a pattern that emerges from the qualitativeinformation and can either be directly observable in theinformation or underscore certain aspects of a phe-nomenon (Boyatzis 1998). We used three criteria foridentification of themes (Motion and Leitch 2002): (1) recurrence of meaning, (2) repetition of the sametext/data, and (3) text salient to the research topic. Weestablished codes as a result of development, redevelop-ment, and refinement of qualitative data interpretation.In the initial coding stage, we used NVivo 7 to searchand retrieve relevant text and quotations according tothe salient aspects of the research topic. We used manualcoding in the later stages to organize the text accordingto themes (Taylor and Bogdan 1998).

FINDINGS

The participants were conscious of external factorsthat significantly influenced their internationalizationthinking—mainly, the size of the domestic market andthe global nature of their industry. Although NewZealand is regarded as a technologically advancedcountry, a population of just over four million meansthat firms operate in a relatively small domestic mar-ket. This, combined with the global applicability oftheir products, presented an opportunity to takeadvantage of foreign markets and is the main motiva-tion for establishing their companies with an inter-national focus from inception. The principal motiva-tion is to take a global perspective and become

significant players when national boundaries are notan obstacle to global domination.

We think there’s no reason why you wouldn’t winon a global stage,... it’s just playing in the biggame and building a global business…. [We] justwant to do it big … showing that you can build aglobal business from this part of the world. (Xero,interview)

[If] you look at some of the other internationaliza-tion examples you go: well what did they do? Wellthey had the resources to go and sell into thosemarkets and make their product popular. Okay sowhy can’t we do that? (Tomizone, interview)

The discussion of the role of networks in the interna-tionalization process as experienced by the participatingfirms requires acknowledgment that each firm used dif-ferent types of networks. These types of networks can beclassified according to their associations and could beeither social connections or business contacts. Thesenetworks are dynamic such that compositions change asinternationalization unfolds.

Internationalization consists of two parts: partone is research and part two is deployment. Forthe first part, you can go through networking interms of learning about the market. You canspeak to a lot of people. You can get help fromNZTE [New Zealand Trade and Enterprise] to

Table 2. Summary of Supplemental Documents

Company Internal Documents Published Materials (Quantity)

Xero Public offer document Company website (1)Press releases/media statements (14)Public presentations notes and slides (1)

Tomizone Marketing plan Company website (2)Press releases/media statements (9) Founder interviews in press (1)

SimWorks Marketing plan Company website (1)Press releases (4)Founder interviews in press (2)

Robot-Hosting Marketing plan Company website (1)Promotional case studies (2)Press releases (4)Speech to investors (1)

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understand some markets and to get some initialcontacts in some of those markets. The deploy-ment’s a lot harder, because then you’ve got toactually find some people that you trust in thosemarkets, people who you will be doing businesswith. (Tomizone, interview)

Using our observations, we developed a network-basedinternationalization model that shows how networksinfluence the internationalization process (see Figure 1).The model captures the interrelationship between socialand business networks leading to the exploration andexploitation of opportunities, respectively. Informalrelationships from already-established and newlyformed networks become sources of knowledge andresources that allow the central actors to explore per-ceived opportunities. These social networks couldpotentially lead to formal business relationships inwhich old and new contacts/actors become significantpartners in the subsequent exploitation of internation-alization opportunities. Intuitively, some business net-works may evolve into social networks (thus the brokenarrow to show this possible relationship). We conceptu-alize social networks as likely to facilitate exploration,but this may also lead to exploitation in the form ofinternational market entry without necessarily goingthrough the business network. We structure the findingsaccording to this framework.

Social Networks and InternationalizationOpportunity Exploration

We find that the entrepreneurs actively strove to use net-works as they explored opportunities for internationali-zation, and on many occasions, past, present, or newlyacquired serendipitous contacts (e.g., from trade fairsand sponsored events) were largely influential in thisprocess. In particular, in the early stages of internation-alization (exploration process), the entrepreneursseemed to use social networks the most. These socialnetworks enabled the process of opportunity explo-ration such that they exerted a significant influence onthe firms’ foreign market selection and entry decisions,and in several instances, social networks led to the for-mation of business networks that enabled the firm’s fur-ther internationalization. We also find that social net-works can be used to validate the potential of a firm’sproduct in the market in which the firm was going toexplore internationalization opportunity. Overall, socialnetworks seem to significantly influence the selection ofwhich markets to enter and serve as a trigger for the ini-tiation of internationalization into a particular market.

Social Networks and Deliberate InternationalizationStrategy. All the entrepreneurs in our study stronglybelieved that networks enable opportunity explorationin the internationalization process and that personalnetworks facilitated the initial expansion of their opera-tions offshore.

[Partnering] is actually key to get this [internation-alization] stuff. You know you only get in bysomebody endorsing you, so partnerships andrelationships are the key. (Xero, interview)

If you’ve got contacts, there’s people you know,that you can call. It makes internationalizationmuch more accessible. (SimWorks, interview)

When expanding in international markets, themost important thing is knowing people, this is the

Social Networks Business Networks

Partnership/Cooperation

Informal Relationship

Established and Newly Formed Networks

•!Deliberate foreign market entry

•!Serendipitous internationalization triggers

•!Gaining credibility in local market

•!Acquiring local market knowledge and customers

•!Overcoming resource limitations

Internationalization

Opportunity Exploration

International Market

Entry (Exploitation)

Figure 1. Network-Based Internationalization Model

Role of Entrepreneurial Networks 97

thing that will get you the expansion. (Tomizone,interview)

Given these statements, it is worth noting that the par-ticipants did not hesitate to take advantage of already-established personal contacts (e.g., Xero in the UnitedKingdom) or actively create new ones as they deliber-ately searched and pursued foreign entry opportunities.

[So] one of the things that you learn as an entre-preneur ... you carry forward your personal con-tacts. So a lot of the last business was also operat-ing out of the UK,... and we made a lot ofrelationships through them, which just rolled intothe next business. (Xero, interview)

If you don’t know anybody the best thing you cando is pay people to be your friend in those mar-kets. (Tomizone, interview)

Among the participating firms, Xero was the onlycompany that showed evidence of strategic thinkingand systematic evaluation of alternative internationali-zation opportunities, though this may be due to theinitial public offer (IPO) and the firm had to convincewould-be shareholders of a planned strategy. Althoughmost New Zealand companies tend to consider Aus-tralia (mainly because of its close proximity) as theirfirst market, Xero selected the United Kingdom at theoutset because the founder had had previous experi-ence in the U.K. accounting system and had formed agood network of personal contacts with local industryknowledge.

Yeah, the reason for that [selecting the UnitedKingdom as the first international market] is that Ithink for New Zealanders it’s a good first market,because we have such good networks over thereand personal relationships. (Xero, interview)

These relationships were further strengthened whenbefore its U.K. launch, Xero won the Technium Chal-lenge, beating other finalists from China, France, andSouth Africa. The competition was organized by Tech-nium UK and International Business Wales to award onehigh-growth international technology company a busi-ness passport to help it set up in Wales. This was viewedby the founder as an important validation of the U.K.opportunity because it opened up an opportunity tobuild “key relationships with accounting firms, banksand law firms … to help accelerate Xero’s entry into theUK market in early 2008” (Xero 2007a).

In addition to the use of previously developed networks,entrepreneurs also engaged in activities aimed towarddeveloping new networks that would potentially assistthem with global product commercialization. This isconsistent with the “purposeful enactment” factor illu-minated by Slotte-Kock and Coviello (2010), in which ashift in a firm’s direction happens as the entrepreneuraligns the network with the environment. To accommo-date this, the participants identified the importance ofspecialized events aimed to assist in the development ofnetworks, such as trade fairs, industry expositions, andcompetitions, to enable them to get known in the inter-national arena and develop potential internationalprospects.

It [internationalization] is not business related, it’snot technology related—it’s personal related. Youwant to do this type of thing you should be an out-going person and you have to do networking, youhave to be kind with people, you have to be alwaysrespectful. It’s kind of communication skills. Yesthese type of things [are] definitely necessary.(Robot-Hosting, interview)

In addition to international competitions, participationin country-specific industry events generates awarenessand future leads. SimWorks participated in the CeBIT(see http://www.cebit.de/home), the world’s largest ICTfair, for two consecutive years when it was seeking inter-national expansion. As part of the New Zealand pavil-ion, SimWorks used its participation at the event as anopportunity to explore new international channels, meetnew customers or partners, and use “networking oppor-tunities with the other companies, [which are] all inter-esting and innovative companies and very valuable con-tacts to have” (Hedquist 2007). However, while suchevents are useful, they may also pose challenges becausethey could potentially put financial pressure on the com-pany as it pursues new leads while establishing othermarkets.

We have done a lot of international work but oneof the things that really tripped us up is that ...things in Australia took far longer than wethought and as a result all of the cash flows thatwe were expecting to come from that didn’t and ...there was no spare capacity at all to do anythingexcept this deal. (SimWorks, interview)

Despite the challenges of managing new business leads,this finding supports current literature that confirms theenabling role of networks around international trade

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shows in the internationalization of small firms (e.g.,Evers and Knight 2008; Shoham 1999). During theseevents, the entrepreneurs also engaged external expertsto help them identify or evaluate initial internationaliza-tion opportunity. This is illustrated in the entrepreneurs’active use of such forms of networks as colleagues, con-sultants, and government agencies.

P1a: Social networks developed from personal con-nections enable exploration of internationali-zation opportunities.

P1b: In the absence of personal connections, indus-try events can act as a proxy for social net-works when exploring internationalizationopportunities.

Social Networks as Serendipitous InternationalizationTriggers. We further find that decisions on a particularmarket selection and entry mode can be triggered byserendipitous encounters rather than from plannedaction determined by strategic decisions, rational pro-cesses, or systematic information gathering (Covielloand Munro 1995; Slotte-Kock and Coviello 2010). Therole of serendipitous occurrence was evident in theencounters depicted in Table 3 as experienced by threeof the participating firms. A holiday encounter andinbound inquiry triggered Tomizone’s entry into Fiji andIndia, respectively, whereas a classic “two degrees ofseparation” scenario (a popular occurrence in smallcommunities when a person is only an introductionaway from someone else) led both SimWorks andRobot-Hosting to their quick exploration of the oppor-tunity to enter the Australian market.

P2: Social networks can arise from serendipitousencounters and lead to the exploration of inter-nationalization opportunities.

Social Networks Can Lead to Business Networks

In addition to social networks exerting a significantinfluence on firms’ foreign market selection and entry,we find that the role of social networks often lead tosubsequent establishment of business relationships thatenable further internationalization in markets in whichopportunities were initially explored. This effect is evi-dent in the case of Tomizone, whose Indian marketopportunity exploration began with an inbound inquirybut subsequently led Tomizone to a successful “India105-city partnership”—a partnership with a giant net-

work company in India that saw the rollout of Tomi-zone’s network software to 242 Wi-Fi outlets across 105cities. Although this seems insignificant in a country of1.2 billion people, National Business Review (Keall2009) reports that “242 hotspots equals around 20% ofthe Indian market.”

Social networks can be successfully used to exploreinternationalization potential, as illustrated by Sim-Works’s strategy using past industry contacts in Aus-tralia. Through these connections, the firm was able togauge the viability and acceptability of its product ideasin the target market and gained a partnership with Aus-tralia’s largest mobile operator seeking precisely thesolution that SimWorks had developed.

I have done a lot of work in Australia before sothen I spoke to ... people I already knew there,people in the industry, to find out whether this wasa viable idea, that it was something that the opera-tors would want there and things like that. So youknow, I talked to people in this market and gener-ally we had some feedback that yip this was aproduct that the market would like and we shouldsell it there. So yeah, that’s how we started. (Sim-Works, interview)

P3: Social networks that enable exploration ofinternationalization opportunities can lead tocollaboration and become formalized businessnetworks.

Business Networks and Exploitation of Internationalization Opportunity

In the subsequent exploitation of internationalizationopportunities, informal networks that were appropriatewere formalized into some form of partnership andother cooperative and contractual agreements. Forexample, Robot-Hosting relied on partnerships toaccess a partner’s sales channels and enjoyed the bene-fits of that distribution network straight away, a processthat would have taken a longer period to achieve. Tomi-zone entered into an original equipment manufacturingagreement with an Australian Internet provider, Sim-Works partnered with an Australian operator after fail-ing to find a suitable partner in New Zealand, and Xeroadopted a critical partnership strategy.

The findings provide evidence that firms tended to relyon partnerships to facilitate product commercializationin international markets. However, depending on the

Role of Entrepreneurial Networks 99

firms’ needs and the characteristics of the products, therequirements for partners varied, and different forms ofpartnerships were used by each firm.

When firms begin exploring internationalization oppor-tunities, some of these inevitably will lead to exploita-tion and formalization of business relationships. Indeed,we find that partnerships and cooperative modes consti-tuted the preferred strategy for the opportunityexploitation process because all participating firmstended to rely on partnerships to facilitate the opportu-nity exploitation process. Furthermore, the firms used

different forms of partnerships that reflected their spe-cific needs. Overall, partnerships enabled and facilitatedthe firms’ internationalization in the following fourways: gaining credibility in the target local market,acquiring local market knowledge and customers, andovercoming resource limitations.

Gaining Credibility in the Local Market. As we notedpreviously, Xero’s strategy for entering the U.K. andAustralian markets was based on the exploitation ofpartnership opportunities. Xero’s service product con-cept is consultancy focused, which made it critical to

Table 3. Social Networks from Serendipitous Encounters

Company Foreign Market Social Networks Description Comments/Evidence

Tomizone Fiji Holiday encounter “I knew that they [resort] needed my service. And theneven when I was in holiday I couldn’t help myself but tosell something. And then on top of that particular resortthere was a bunch of coffee shops around Fiji that hadthe same brand as the one that we do work with here.And so I said at the same time you guys need the serviceup here.… And then with that they said yes.”

Tomizone India Inbound inquiry “[That] was an inbound enquiry from someone that wasat a senior level in the market. And we were looking atthat market anyway as market entry. So it was sheer fatethat made that happen. By some fateful match some-where this person was the right person to ring at theright time. And I was the right guy to pick up the phoneand answer the call…. He [the partner from India] wasin New Zealand on holiday and he saw the service, andhe thought this would be big in India. And he did hisown little bit of research in the background and madecontact with us from there.”

SimWorks Australia Chance encounter “We hit upon a partner that was already involved in atransaction with a mobile operator in Australia for doc-tors and that operator had expressed a desire to havesomething just like we had, so we just basically walkedinto it. [These] guys had already done the hard work,[and] it was our part of the sales really, finding theseguys that have already done it. So once we found theseguys we kind of walked into this deal.”

Robot-Hosting Australia Two degrees of separation “I met this guy and this guy knew another guy and theother guy knew a third and the third guy had a connec-tion with the mining company. Then they said okay andI’m on the plane three days later. I went there and metthem and arranged a deal and then we went to the min-ing company, I presented it there and the guy said yes,go for it.”

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develop partnerships with local companies to getendorsements and gain credibility among potential localcustomers. This was a deliberate internationalizationstrategy in which Xero (2007b, p. 33) developed a“critical partnership strategy” described in its publicoffer document: As an “effective partnering program tosell the Xero program through its partners,... this [pro-gram] will provide Xero with scalable growth opportu-nities as well as lower costs of sale.”

For their Australian entry, Robot-Hosting opted for asupplier partnership with a large mining company inAustralia, which enabled the firm to generate sales whileavoiding large foreign market investment and costsassociated with establishing a market presence (e.g.,staff, office). SimWorks’s partnership with an Indiancompany ensured that it was not perceived as a foreigncompany, and establishing a branch office in Fiji wasacceptable given the favorable image of New Zealand inthe island nation.

P4: The use of business networks is an effectiveapproach to gain initial credibility when enter-ing a new market.

Acquiring Local Market Knowledge and Customers.Business partners in host markets become an importantsource of market knowledge that is crucial to strategicdecisions. This may be in the form of regulatory issuesor industry-specific knowledge of competitors andmajor players. Thus, this knowledge facilitates a seam-less entry, and hurdles are anticipated and addressedbeforehand. As the Xero respondent stated, “Our earlierestablished relationships in the market were a great wayto gain initial insights into the U.K. accounting market.”

Partnerships and cooperative modes continued to be thepreferred strategy for subsequent international marketentry. For example, Xero’s strategy for Australia wasbased on exploitation of partnership opportunities. Asequence of media releases issued by the company con-firmed that Xero partnered with two of Australia’slargest banks to provide automated daily bank feeds andlater entered into a marketing partnership with a lead-ing Australasian practice management accounting soft-ware provider, which gave it access to thousands of thisfirm’s clients in Australia.

The intended partners include accountancy firms,financial advisers, financial institutions, InternetService Providers, sector, industry and trade asso-ciation groups. These are all organizations that

have day-to-day contact with large penetrable cus-tomer bases. Partners will be rewarded through astructure that will encourage them to promote theXero product to their customers. (Xero 2007b)

Tomizone’s agreement with local Internet providersfacilitated the integration of its product within the part-ner’s products and distribution through the partner’schannels while retaining its brand. The firm executed apartner strategy in India and a branch office strategy inFiji. Its marketing plan indicated that based on countryconditions, these were the most efficient and effectiveways to establish the Tomizone presence in these par-ticular markets.

In addition to business contacts, more formal businessnetwork actors, such as consultants and governmentcontacts, were also widely used by the participants.Xero attributes its success in the United Kingdom to thenetworks it accessed through an NZTE-initiated pro-gram, UK Beachhead program.

The Beachhead program opens up fantastic net-works [and] was a great way to access networks inother countries—people, opportunities, andpotentially investors.... Successful exporting is allabout networking, making connections and get-ting revenue. That’s the most important thing.(Xero, interview)

The NZTE established a U.K. advisory board thatincluded well-connected and experienced U.K.-basedpeople who were members of the NZTE Beachheadboard and were willing to help Xero get into the UnitedKingdom.

P5a: The use of business networks is an effectiveapproach to acquire local market knowledgethat enables successful exploitation of interna-tionalization opportunities.

P5b: The use of business networks is an effectiveapproach to gain access to local customersand, thus, to mitigate the impact of the uncer-tainty associated with foreign market entry.

Overcoming Resource Limitations. With limitedresources, entrepreneurs also engaged in activities aimedto develop new networks that would be able to assistthem with global product commercialization. Partner-ships from networks assist companies that are otherwiseunable to enter foreign market because of limited

Role of Entrepreneurial Networks 101

resources. This is consistent with the “purposeful enact-ment” factor Slotte-Kock and Coviello (2010) illuminate,in which a shift in a firm’s direction happens as the entre-preneur aligns the network with the environment. As therespondent from Robot-Hosting said, “Always financialresources is constrained and if you don’t have the finan-cial resources you have to develop partnerships.”

To accommodate this, the participants identified theimportance of specialized events aimed to assist in thedevelopment of networks, such as trade fairs, industryexpos, and competitions. These events enabled them toget known in the international arena and to developpotential international prospects. In addition to inter-national competitions, participation in country-specificindustry events generates awareness and future leads.During these events, the entrepreneurs also engagedexternal experts to help them identify or evaluate initialinternationalization opportunities. This is illustrated inthe entrepreneurs’ active use of such forms of networksas colleagues, consultants, and government agencies. Asthe respondent from Xero said, “Internationalization isall about resource allocation and making sure that yourspending levels are appropriate for where you’re at andhow much cash reserves you have.”

The findings provide evidence that firms tended to relyon partnerships to facilitate product commercializationin international markets. Motives for internationaliza-tion among these entrepreneurs originated from theirintention to seize international market opportunities.The foundations for early internationalization wereembedded in their firms’ strategies based on innovativeproducts and developed in response to identified globalneeds right from the start. It seems that the founders/entrepreneurs had first recognized a need and thenestablished a company around that need. In addition,there emerged a strong “aspirational” aspect to thefoundation of the companies, showing that it is possibleto build a global business from anywhere in the world.

P6: Business networks are an effective approach toovercome resource limitations and enable born-global ICT firms to broaden their formal businessnetworks and facilitate the exploitation of interna-tionalization opportunities.

DISCUSSION AND CONCLUSION

This study shows that, in general, entrepreneurs usesocial networks to explore opportunities for interna-

tionalization and find that on some occasions, socialnetworks can be a source of actual international oppor-tunity. In addition, serendipitous contacts, such asinbound inquiries, can facilitate subsequent internation-alization. The evidence illustrates that networks exert asignificant influence on firms’ foreign market selectionand entry.

International opportunity exploration can result froman unexpected opportunity rather than through plannedaction determined by strategic decisions, rational pro-cesses, or systematic information gathering (Covielloand Munro 1995; Slotte-Kock and Coviello 2010). Thiseffect is evident in the case of Tomizone for which deci-sions about its second and third international markets(including entry mode and timing) were greatly influ-enced by serendipitous encounters. For Robot-Hosting,the process of initial international opportunity explo-ration was influenced by a new partner who joined thecompany. Although the founder believed that inter-national activity would be important for the firm, it wasthe knowledge possessed by the new partner that influ-enced his decision to eventually exploit global markets.Overall, the participants believed that the presence ofpersonal networks in foreign markets made it easier forthem to enter such markets.

The results further suggest that the networks themselvesin the opportunity exploration process can be a sourceof internationalization opportunity. The effect is evidentin the case of Robot-Hosting for which social networkwas a trigger for initiating commercialization of thefirm’s product. For SimWorks, the entrepreneur’sknowledge of the Australian market and his previouslydeveloped network connections led to a partnershipwith Australia’s largest mobile operator. Without theexistence of relationship networks, this opportunitymay not have been available to the firm.

Network theory has received significant attention in exist-ing internationalization and international entrepreneur-ship literature. In particular, the impact of both social andbusiness networks on the internationalization processesof firms has been extensively investigated (Coviello andMunro 1997; Crick and Spence 2005; Johan son andMattsson 1988, 1992; Johanson and Vahlne 2003;Jones 1999). Therefore, we investigated the process ofrecognizing/creating the opportunities and the nature ofdecision making that may account for the often-unsystematic internationalization behavior. The resultsof this study show that entrepreneurs take advantage ofall the various network forms throughout the different

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stages of the internationalization process. As interna-tionalization of a firm proceeds, the role and nature ofthe networks change. The findings provide evidence thatin the process of opportunity exploration, entrepreneursof born-global ICT firms may use their social networksas information channels through which the firm gainsinformation about international markets and opportu-nities. We find that in instances in which entrepreneursactively searched for their first opportunities, the deci-sion on initial international market selection was influ-enced by the location of their personal networks. Thestudy further suggests that networks themselves areactual sources of internationalization opportunity. Insome instances, internationalization opportunities werepresented through serendipitous encounters. This ele-ment of discovery involved the actions of others who,acting on their own knowledge and information, locatedthe focal firms. Furthermore, the entrepreneurs alsoengaged external experts, such as colleagues, consult-ants, and government agencies, to help them identify orevaluate an opportunity.

This study’s main contribution pertains to the networktheory of internationalization by investigating the roleof networks through an exploration–exploitation lens inthe pursuit of international opportunity. This frame-work complements prior studies on entrepreneur-centered networks and their role in the internationaliza-tion process by providing insight into the logic behindthe nonsequential and nonlinear patterns of network-driven internationalization, such as access to prior net-works, discovery through the actions of new networks,and the role of serendipitous contacts. With these find-ings, we are consistent with Slotte-Kock and Coviello’s(2010) work, which stresses the importance of allowingfor “randomness” and “unpredictable incidents” fac-tors and their ability to influence the network develop-ment when investigating, interpreting, and depictingnetwork process.

The qualitative approach we took in this investigationalso contributes toward better understanding (Hoangand Antoncic 2003) how and why firms identify and/orcreate internationalization opportunities and how theyfurther develop the strategy for pursuing these. The roleof social and business networks in the proliferation ofinternationalization opportunities as presented in thismodel is consistent with the network perspective ofinternationalization in which internationalization isenabled through the use of resources and informationpossessed by connected social and business networksthat, combined with the firm’s own resources and

knowledge, allow it to find, identify, respond to, anddevelop internationalization opportunities. Thus, con-sistent with previous research, we find that when oppor-tunities are more refined, resources and knowledge fur-ther develop and new types of problems call for moreformal strategies. This helps explain the transition fromthe social type of networks to more calculative or busi-ness types of networks that tend to develop in the laterstages.

By emphasizing the role of previously established entre-preneurial networks in the identification/developmentof opportunities and creating new network relationshipin new ways, we offer a more refined understanding ofhow the network perspective works that is consistentwith the notion that network influence starts at the“pre-internationalization, pre-growth and even pre-commercialization stage of new venture life cycle, thatis, from the very earliest stage of firm development: con-ception” (Coviello 2006, p. 723). Therefore, we con-tribute to the network view of entrepreneurial interna-tionalization by providing evidence for the need tounderstand the process of network evolution from thebeginning of the new venture’s life cycle rather thanfrom the point at which the firm enters its first foreignmarket.

In general, we can conclude that ICT companies enterand sustain a competitive position in the global market-place by developing and using social and business net-works. This implies that firms trying to commercializetechnological innovation on a global scale need to incor-porate a thoughtful approach in the development andmanagement of networks as primary competitive toolsinto their strategic planning. Entrepreneurs and entre-preneurial firms can benefit from making the best use ofany existing networks and therefore should focus theirefforts on development in markets in which they poten-tially want to expand. In addition, entrepreneurs cangenerate internationalization opportunities throughindustry events, such as conferences and trade shows.

Although this article offers several contributions, aswith any study, it is not without limitations. First, weundertook the study in a narrowly defined industry con-text (New Zealand–based internationally focused ICTfirms) and considered only firms that can be classified asknowledge intensive, with advanced capabilities in tech-nology and an educated workforce. Although such anarrowly defined context is desirable from the methodo-logical logic pursued in this study, it poses limitations onthe findings in the context of broader born-global and

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internationalization theory. This is particularly impor-tant given that contextual factors are often reported toinfluence the ways that firms relate to their markets.

The second limitation that restricts the findings’ interpre-tation is the number of cases studied, which we limitedto four and selected according to very particular criteria.Selection of a greater number of cases might provide aclearer picture of the driving force and influential factorsand their interrelationships. The sample used in thisstudy is theoretical, not random, because only the firmsthat qualified for the study and were willing to partici-pate were interviewed. Therefore, generalizations thatcan be made from the research findings are somewhatlimited. Further research into the connections betweenand among different actors within a network; the trans-fer of capabilities and knowledge to other members of anetwork; and an in-depth investigation of outcomes,including firm performance attributed to network rela-tionships, would contribute to a better understanding ofthe network and internationalization phenomena.

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THE AUTHORS

Elena Vasilchenko is a New Zealand director of theinternational consulting firm Agitavi, which undertakestechnology business research, delivers learning anddevelopment to technology executives, and providesthought leadership to central and local governments inlocal software economy development. Her researchinterests revolve around technology business strategy,ICT marketing, management and internationalization,software innovation management and entrepreneur-ship, ICT-based industrial cluster growth, local soft-ware economy creation, and ICT-enabled economicdevelopment.

Sussie Morrish is Senior Lecturer in Marketing at theUniversity of Canterbury where she teaches undergrad-uate and postgraduate courses. Her research interestsrevolve around the interface between marketing andentrepreneurship. In particular, she investigates port-folio entrepreneurs and various strategic approaches tointernationalization, corporate ventures, sustainability,property decisions, and country-of-origin effects. Shehas previously taught at the University of AucklandBusiness School.

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